Finality of the income tax return for individuals

Once the income tax return is filed, it will take a period of 3 or 5 years to become final before the Dian or 6 or 12 months if the audit benefit is granted.

This is a legal condition with which the return can no longer be modified by the tax administration or the taxpayer.

Finality is the legal status that a tax return acquires in such a way that it cannot be questioned or modified by the Dian. In this regard, the current versions of Articles 714 of the Tax Statute -ET- and 117 of Law 2010 of 2019 establish that the income tax return has a special finality period of three (3) to five (5) years.

For example, if it is an income tax return of the ordinary regime in which no tax losses are liquidated (regardless of whether the return shows a balance payable or in favor), the Dian has three (3) years to audit it, counted from the expiration of the deadline to file in the case of timely filed returns, or from the day of filing if they are extemporaneous.

In any case, if the balance in favor of the return is requested in refund or compensation, the three (3) years to audit it will begin to count from the time the respective request has been filed.

According to Article 147 of the ET, the Dian has twelve (12) years to audit an income tax return of the ordinary regime if any tax loss that may be offset in subsequent years is settled on it. However, Law 2010 of 2019 states:

Article 117. Finality term. The term of finality of Articles 147 and 714 of the Tax Statute of the income and complementary tax return of taxpayers who determine or offset tax losses, or who are subject to the Transfer Pricing Regime, shall be five (5) years.

Therefore, for the returns filed during 2020 and subsequent periods, the finality will operate as follows: in the case of the income tax return of taxpayers subject to the transfer pricing regime, the finality period will correspond to five (5) years, in the same way as it occurs with the returns in which losses are determined or compensated. However, there is still no clarity as to whether this period begins after the taxable year in which the loss was liquidated or after the filing of the return.

Finally, in accordance with the new article 689-2 of the ET (audit benefit), modified by article 123 of Law 2010 of 2019, in the case of income tax returns of the ordinary regime for taxable years 2019, 2020 or 2021 that are filed in compliance with the requirements established therein, the Dian will have six (6) or twelve (12) months to audit them (counted from the date of filing).

Opportunity to correct a return

Taking into account that the term to correct a tax return is three (3) years counted from the deadline to file, if a taxpayer, for example, files its income tax return for the taxable year 2021 on August 9, 2022 (the day on which the deadline to file the return expires), it will have the opportunity to correct such return until August 9, 2025.

Let us recall that the previous version of article 588 of the ET indicated that the term to correct returns was two (2) years from the expiration of the deadline to file; for such reason, if the taxpayer plans to correct an income tax return corresponding to the taxable year 2018, filed in 2019, he/she must take into account that the opportunity to make the correction was until 2021. This given that Law 2010 of 2019, which amended Article 588 and extended the deadline to make corrections, only came into force as of December 27, 2019; therefore, returns filed before its entry into force do not have its provisions applied to them (see Dian Concept 2616 of 2020).

On the other hand, it is important to highlight that, in the case of corrections intended to reduce the amount payable or increase the credit balance, according to the indications of article 589 of the ET (not modified by Law 2010 of 2019), the taxpayer has one (1) year from the expiration of the deadline to file the return.

In addition, when the income tax returns of the ordinary regime for taxable years 2020 or 2021 are covered by the audit benefit of article 689-2 of the ET, the taxpayer may not modify them either, given that, if the return is final for the Dian, also for the taxpayer, so that corrections will not be admitted.

Source: Actualícese.

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